Investing can be challenging because you need to think about your long-term money goals while watching daily market changes. This challenge exists whether markets are going up or down. When you see news about stocks, digital currencies like Bitcoin, or metals like gold doing well, it can make you feel like you need to act quickly or worry about missing out.
Smart investors who have been through many market ups and downs have learned an important lesson: there are no guaranteed easy wins in investing. This is why basic investments like stocks and bonds remain the main building blocks of most investment portfolios. These investments help you balance risk and potential rewards to reach your money goals. On the other hand, when markets get overly excited about certain investments (like technology stocks or Bitcoin), prices can drop quickly and without warning.
The secret to successful investing is not trying to guess when these price swings will happen. Instead, it’s about building a mix of investments that can benefit from different market conditions while staying focused on your long-term financial plans. What really matters is not whether your portfolio includes whatever investment everyone is talking about this week. What matters is whether you can retire comfortably, take care of your family, buy a home, or support causes you care about.
Right now, Bitcoin has reached new record highs, copper prices have hit all-time peaks, and precious metals like gold and silver are rising. These increases reflect both improving market conditions that have helped many investments, as well as specific policy changes in Washington and growing interest from large institutional investors. The question for investors is: how can you think about these investments as part of your overall portfolio rather than as separate, standalone bets?
Bitcoin experiences very large price swings
Bitcoin has jumped to new highs as Congress looks at several cryptocurrency rules during what people are calling “Crypto Week.” The House of Representatives is reviewing the GENIUS Act, which would regulate stablecoins (digital currencies designed to maintain steady values, often tied to the U.S. dollar). They’re also considering the CLARITY Act, which would create clearer rules for regulating cryptocurrencies, and the Anti-CBDC Surveillance State Act, which would prevent the Federal Reserve from creating a digital currency.
Generally, Bitcoin and other cryptocurrencies grab investor attention because of their extreme price movements, growing interest from large institutions, new investment products like ETFs (exchange-traded funds), and concerns about government spending and monetary policy. Many of these topics are complicated and uncertain. For long-term investors, the most important question is whether cryptocurrencies can play useful roles in investment portfolios.
Whether Bitcoin belongs in your portfolio depends on your specific goals and how much risk you’re comfortable taking. The reality is that Bitcoin’s price moves up and down much more dramatically than the stock market. During the 2022 bear market (when prices fell significantly), Bitcoin dropped over 75% while the S&P 500 (a measure of large U.S. stocks) declined about 25%. This shows that digital currencies can increase your portfolio’s risk during stressful market times. Bitcoin did bounce back more strongly afterward, but as the chart above shows, the S&P 500 and Bitcoin have moved similarly since 2018, just taking different paths.
It’s also worth noting that not all cryptocurrencies have moved the same way as Bitcoin. Ethereum, another well-known cryptocurrency, is actually down this year and has fallen about 25% from its peak last December. There are also countless other cryptocurrencies and “meme coins” that have followed completely different paths. As always, it’s important not to react to headlines and to carefully think about how these investments fit into your overall portfolio.
Copper’s price increase reflects economic growth and trade policies
Copper, another investment that has gotten recent media attention, jumped to record highs after the White House announced 50% tariffs (fees on imports) on copper brought into the country.
Copper is crucial to the economy because it’s an industrial metal needed for construction, electrical systems, electronics, and renewable energy projects. For this reason, copper is often used as an economic indicator, sometimes called “Dr. Copper,” because its price movements can help predict economic trends.
Currently, the United States gets 45% of its copper from other countries, mainly Chile, Canada, Mexico, and Peru. Tariff policies might encourage more copper production within the United States over time, but they will also affect pricing and supply chains in the short term. Additionally, China uses a lot of copper, which makes the metal’s price sensitive to global economic conditions and trade relationships.
How does this affect you as an investor? Like Bitcoin and other volatile (price-changing) investments, it’s important to separate sharp price movements from whether an investment fits well in your portfolio. Trying to predict copper’s next move is like trying to predict exactly what will happen with the economy and trade policy. Instead, you should focus on whether copper and other investments help improve your portfolio’s characteristics, alongside other investments that are sensitive to economic conditions, including stocks.
Precious metals like gold and silver have special features to consider
Gold and silver have also risen recently, benefiting from their traditional roles as potential protection against currency changes, inflation concerns, geopolitical risks, central bank purchases, and other factors. In theory, gold and silver can serve as stores of value during economic uncertainty, although they face challenges such as not generating any income (like dividends or interest).
As the chart above shows, gold increased in value during periods like the global financial crisis. However, over longer time periods, the stock market has performed better than gold, even after gold’s recent rally. During the 2010s, many people expected gold to keep rising as the Federal Reserve (the U.S. central bank) kept interest rates low. The fact that this didn’t happen shows how difficult and surprising it can be to predict where gold will go next.
So, once again, what should matter to a long-term investor is your overall portfolio and whether it matches your long-term financial goals. Investments like Bitcoin, copper, gold, and silver highlight both their potential benefits and the importance of making thoughtful decisions about how much to include in your portfolio. At minimum, these investments should add to, not replace, diversified holdings in stocks, bonds, and other core investment types.
The bottom line? While many investments are in the news because of their recent price increases, investors should avoid chasing short-term performance. Instead, understanding each investment’s unique characteristics is the best way to align your portfolio with your long-term financial goals.
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